Samuel J. Palmisano
IBM Chairman, President and Chief Executive Officer
Final Remarks, as prepared
SmarterCities Forum
New York City
October 1, 2009
Keynote Address
Building a Smarter Planet: City by City
Welcome to New York City and to the SmarterCities Forum.
I want to thank you all for joining us and thank our event partners—the Partnership for New York City, the City University of New York, the Brookings Metropolitan Policy Program and many other organizations specializing in urban issues—for helping us convene what promises to be an exciting and important conversation about the future of our cities.
Making our cities work more effectively is essential to our planet's sustainable future—and it's an effort that can only succeed through collaboration across all sectors of the economy. And judging by the crowd we've gathered today, it is clear that we are convening at a consequential moment in support of a common goal.
Today, we are joined by approximately 525 leaders—mayors... federal, city and regional officials... CEOs... and urban experts from academia—representing more than 180 cities in more than 25 countries across the Americas, Europe and Asia.
We have gathered here to explore the new tools, new models and new leadership requirements that are reshaping the city ecosystem for the 21st century. We will hear from some of America's most forward-thinking leaders on how they are transforming critical components of our cities and, together, shape a new vision for our cities.
A Planet of Smarter Cities
It's not an exaggeration to say that humanity's story over the past 5,000 years—in other words, what we call "history"—has been, at root, the story of how our planet has become urbanized. And as you know so well, the pace of this 5,000-year-long story is now accelerating.
Consider this: If humans had been able to go into orbit around the Earth 100 years ago, they could have seen the light from 16 concentrations of a million or more people. New York would have been one of them.
Today, as the crew of the space shuttle orbits our planet, they can see the lights of 450 shining cities of a million-plus. These cities are the economic, governmental, cultural and technological power plants of an urbanizing world.
In fact, in 2007, we crossed a major threshold. For the first time ever, more than half of us were urban dwellers. By 2050, that number will rise to 70 percent. We are adding the equivalent of seven New Yorks to the planet every year.
We should be proud of this unprecedented urbanization. It is an emblem of our economic and societal progress—especially for the world's emerging nations.
But it is also a huge strain on the planet's infrastructure. And no one feels that more urgently than you and your peers around the world. A city's shoulders may be broad, as a poet once wrote, but today they literally have the weight of the world on them.
The Reality of Global Integration
Arguably, there has never been a time when we were more conscious of that weight than we have been over the past decade. I would suggest that start of the 21st century has constituted a series of wake-up calls on a single subject: the reality of global integration.
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These collective realizations have reminded us that we are all now connected—economically, technically and socially.
Something Meaningful is Happening
But we're also learning that being connected is not enough.
Yes, the world continues to get "flatter." And yes, it is getting smaller and more interconnected. But something is happening that holds even greater potential—and not a moment too soon.
In a word, our planet is becoming smarter.
This isn't just a metaphor. New intelligence is being infused into the way the world literally works—the systems and processes that enable physical goods to be developed, manufactured, bought and sold... services to be delivered... everything from people and money to oil, water and electrons to move... and billions of people to work and live.
Infusion of Intelligence into the Way the World Works
First, our world is becoming instrumented:
The transistor, invented 60 years ago, is the basic building block of the digital age. Today, there are nearly a billion transistors per human, each one costing one ten-millionth of a cent. There are 4 billion mobile phone subscribers, and 30 billion Radio Frequency Identification tags produced globally.
Because of their increasing sophistication and low cost, these chips, sensors and devices give us, for the first time ever, real-time instrumentation of a wide range of the world's systems—natural and man-made... business and societal.
Second, our world is becoming interconnected:
Very soon there will be 2 billion people on the Internet. But that's just the beginning. In an instrumented world, systems and objects can now "speak" to one another, too.
Think about the prospect of a trillion connected and instrumented things—cars, appliances, cameras, roadways, pipelines... even pharmaceuticals and livestock.
And then think about the amount of information produced by the interaction of all those things. It will be unprecedented.
Third, all things are becoming intelligent:
New computing models can handle the proliferation of end-user devices, sensors and actuators and connect them with powerful back-end systems. Combined with advanced analytics, such supercomputers—and new computing models like "clouds"—can turn mountains of data into intelligence.
And that intelligence can be translated into action, making our systems, processes and infrastructures more efficient, more productive and responsive—in a word, smarter.
The Digital and Physical Infrastructures of the World are Converging
Another way to describe these shifts is to say that the digital and physical infrastructures of the world are converging.
Computational power is being put into things we wouldn't recognize as computers. Indeed, almost anything—any person, any object, any process or any service, for any organization, large or small—can become digitally aware and networked.
Thanks to these technology shifts, our world is getting smarter.
The World is Getting Smarter
You can see this in how companies and institutions are rethinking their systems and applying technology in new ways.
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This list goes on—smarter oil exploration in Norway, smarter social security in Belgium, smarter healthcare in Cleveland, Ohio and northeastern Pennsylvania. All around the world, economic stimulus is being injected by governments... much of it aimed at smart grids, healthcare data integration, water management and smarter transportation.
The City: A System of Systems
All of this comes together in the city. Consider some of the key systems that are essential to the functioning of a city today:
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The challenges you face—educating your young, keeping your citizens safe and healthy, attracting and facilitating commerce... enabling the smooth flow of planes, trains, cars and pedestrians—are only being compounded by the global economic downturn.
The good news is, we have the potential—both technological and political—to make our cities smarter. And it's clear that the time to act is upon us.
We held our first Smarter Cities forum in June, in Berlin. More than 350 leaders from 130 cities across Europe showed up and engaged us in a powerfully moving discussion.
The session underscored the passion and momentum that exists in support of urban transformation—and the energy that is building to make these ideas a reality. We felt it was important to continue that dialogue and bring it here, to North America.
Specifically, we're using what we learned at our Berlin conference to shape the agenda and format for the next two days.
One of the things that became clear in Berlin was a great hunger to learn how these smart solutions and projects were done—not so much technically, but how buy-in was achieved, and funding... how cases were formulated... and how consensus and coalitions were built. We've designed this event to maximize opportunity for just that kind of peer-to-peer discussion.
We'll hear from leaders and innovators who are implementing smarter systems in their cities and their organizations. Then tomorrow, my colleague Ginni Rometty, who heads up IBM's global sales organization, will tell you about some of the work we have done with forward-thinking leaders around the world to make their systems smarter. And she'll explain what we've learned about the steps you can take to make your city smarter.
And then we'll move to what I think is the most important part of this forum—breakout sessions where all of us—the urban experts and leaders from your teams, from smart agencies in your cities, and from IBM—can roll up our sleeves, share insights, and take some deep, system-by-system dives into building the roadmap toward a smarter city.
The New Leadership Requirements
The key, as always, is not technology, but leadership. Let me offer three thoughts about the management and leadership challenge of building smarter cities.
First, we will have to be far more collaborative. This is not just the familiar "public and private sector" formula. It's multi-directional, multi-stakeholder, truly global.
Think about it—none of the systems I've mentioned is the responsibility of any one entity or decision maker. They all involve business, government, communities... all of civil society.
This will require new ways of leading. Our traditional idea of a leader is someone with superhuman vision and will... someone who sees the future and charges ahead—either compelling or inspiring others to follow. But given the complex reality of a global system of systems, this model no longer seems appropriate.
Much more, we will have to lead by listening—by attending to what these multi-faceted ecosystems are telling us. We need to influence, not dictate. A reality as dynamic and complex as this must be approached with humility, and with an intent to serve, rather than to dominate. And we will need management systems that are architected for inclusion, collaboration and transparency.
In many ways, this forum has been built around just that premise.
Second, we need standards. Of course, the importance of standards is widely understood—not just technology standards, but new, global rules of the road for trade policy, intellectual property and more.
But when you look at the city as a system of systems, you realize that this question of standards is far more complex and immediate. It's about interfaces. In systems, interfaces matter, compatibility matters. Just because you throw things together doesn't make a system. To build a true system, you need much more than hand-offs.
We need standardized interfaces between the transportation system and the energy system... between the education system and the healthcare system... and among water, traffic, commerce, public safety and government services.
To be sure, there are limits to the standardization possible in any system—technical, social or natural. And that's especially true when it comes to systems where the key components are human beings. But if we're going to have effective global systems, rather than global system breakdowns... if we're going to build truly smart cities... we will need a greater level of interface standardization than we have had heretofore.
Finally, as leaders, as organizations and municipalities... and as a society... we must not hunker down or retreat into our shells. Our regulations, policies and institutions should encourage greater openness and innovation, not hinder it.
This is important. We have a choice to make now. I believe it would be a grave error to circle the wagons or adopt protectionist policies. That would be to race toward the past, not toward an interconnected, intelligent future.
In fact, it would be a fundamental error in systems thinking. Its result would be to increase our vulnerability to global system crises (both man-made and natural), rather than to reduce it.
Building a Smarter Planet
The urbanization of Planet Earth is one of those developments—arguably, the signal one—that is big enough to "see from space." And all those bright city lights, shining back at the stars, mark the most promising opportunities for shaping how our world works and how we live.
I, for one, am optimistic that we will succeed. Most importantly, the key precondition for real change now exists: People want it. From board rooms, to cabinet rooms, to kitchen tables around the world, there is a hunger for fundamentally new approaches.
However, this moment will not last forever. And in hindsight, when the circumstances that cry out for change are gone, when things have returned to "normal"—don't we always wish we had been bolder, more ambitious, gone faster, gone further?
A period of discontinuity is, for those with courage and vision, a period of opportunity. Over the next couple of years, there will be winners, and there will be losers. Some companies, some industries and some cities will shine more brightly than others. And the new leaders who emerge will win not by surviving the storm, but by changing the game.
One thing I think is clear: The world will continue to become smaller, flatter... and smarter. We are moving into the age of the globally integrated and intelligent economy, society and planet. And that is a future of enormous promise.
I believe it is one that we can build—if we open our minds and let ourselves think about all that a smarter planet... a planet of smarter cities... could be.
New York City
When you think about all that a smarter city can be, you quickly realize that there is no better place in the world to explore those possibilities than New York.
In many ways New York defined what it meant to be "urban" in the 20th century—inventing, extending and integrating many of the iconic city systems—from subways, to skyscrapers... from Wall Street, to Broadway, to Times Square... from finance to media, publishing, entertainment, journalism and culture.
It was also New York that shaped our understanding of the city as a melting pot... a gathering and intermingling of the entire world... a social unit that goes beyond the distillation of one nation or people.
Indeed, the modern idea of a "world city" really begins here.
And this also happens to be a place where IBM has deep roots. New York State is our birthplace and home. And we have deepened our roots further over the decades. We are one of New York State's leading employers—and we have invested more than $6 billion here since 2000, more than any other corporation.
As a further demonstration of our belief in New York, I am pleased to announce the creation of a new Business Analytics Solution Center here—in fact, a couple of blocks away, at Madison and 57th. Earlier this year I committed IBM to the creation of multiple such centers—hubs of new capability for our clients around business analytics and optimization. We have already announced centers in Berlin, Tokyo and Beijing, with more to come. The New York center will initially draw on 450 IBM staff, tapping experts across our consulting, software and Research organizations, with a focus on the public sector and finance.
And with that, it is my great pleasure and honor to introduce someone who is at the forefront of both exploration and impact in making the smarter city a reality—by virtue of his position, his life experience and his vision... New York's Mayor Michael Bloomberg.
